01 Oct 2016

INS Roundtable Meeting The Hague, 22 September 2016

“Current State of Play of Indonesian Politics and 2019 Prospects”

It is my great pleasure to join you at this roundtable today, as the last time I was here was at the INS gathering six years ago. I am pleased to meet you all, my old and new friends of Indonesia.

It is with particular joy that I have the opportunity to meet my good old friend Bernard Bot, who was my counterpart as Foreign Minister (2003-2007), for which I’m proud to recall of the excellent personal and professional relationship that we developed. Together we laid the stronger foundations of the bilateral Indonesia-Netherlands relationship. Together we developed the Comprehensive Partnership between Indonesia and the Netherlands.

Allow me to share with you my views on the subject of “Current State of Play of Indonesian Politics and 2019 Prospects”, the main theme of this Roundtable.

Political Stability and National Security of Indonesia

Against the backdrop of a military dominated government under President Suharto – who ruled Indonesia for 32 years – and the multidimensional crisis that struck Indonesia following the financial and monetary crisis of 1997-1998, the democratic transition in the past 16 years went very well – very peaceful and democratic.

New checks-and-balances were developed – amongst which a directly elected President, a powerful parliament, and growing independence of the judiciary system — but also recognition of the importance of dynamic interplay between the state, business sector, civil society and mass media.

An important landmark of the reform process is the direct election of the President since 2004 and the hundreds of periodic direct elections of Governors, Bupatis and Mayors. With 185 million registered voters, all elections are organized by around 600.000 polling stations, and all elections are completed in one day.

In the past 17 years, all elections were very peaceful, free, fair and democratic. Also in 2019, all elections will be held at once: President, Members of Parliament, and at the local level Governors, Mayors, Bupatis and members of the local council.

So when we talk about the stability of the current government of President Jokowi (20014-2019), it is largely a continuation of the past trend, which was well maintained in the past two years and I believe will also be the case in the foreseeable future.

Likewise on the security front, I would say that in the 71 years of Indonesia’s independence, Indonesia never has enjoyed relative peace and security as we have in the past 17 years of the era of openness and democracy.

Of course, there are incidents of violent extremism and terrorism. But our counterterrorism policy has been quite successful. The key to this is the fact that, while Indonesia is the largest Muslim country (not Islamic country), the overwhelming majority of Indonesian Muslims are very moderate.

The peace and security that we enjoyed allowed us to focus our time, energy and resources on our economic development. Hence, the economic progress made by successive governments in this era of reform.

During the time of President Megawati’s Government (2001-2004) and President Yudhoyono’s Government (2004-2014), Indonesia’s economy grew by an average of 6% until the 2008 global financial crisis. But even then we managed in 2009 an annual economic growth of 4,5%.

Last year and this year, Indonesia’s growth is at an average of 5%. This coincides with the recognition of Indonesia as an emerging economy, therefore in 2008 Indonesia was invited to join the G20 and in this group, Indonesia ranked 18th and now the 16th largest economy.

According to the World Bank, in terms of its GDP per Purchasing Power Parity, Indonesia was the 10th largest economy and a year later, according to the IMF, it was the 9th largest economy, overtaking Italy.

It was against this backdrop that President Jokowi was elected as the 7th President of the Republic.

He brought new things to his Presidency, which in a way was a breakthrough to Indonesia’s traditional politics. He is not from any kind of establishment or from the Indonesian political elites. He was not chairman of any political party. He was simply “a cardholder” as member of the PDI-P.

Neither was he a high-ranking official of the Indonesian bureaucracy or a military general. He came from a humble family who lived in Solo. His family experienced evictions from living on the riverbanks of Bengawan Solo.

Jokowi’s political capital was developed as the Mayor of Solo – a small town of 600.000 people. He was a two-term Mayor and was re-elected with 92% of total votes – the highest in the country. He moved up through the political ladder as he was nominated to be Governor of Jakarta. Competing against an incumbent, Fauzi Bowo, who was widely backed by a coalition of parties. Against all odds, Jokowi won.

It was a beginning of a breakthrough that in the process of electing leaders, the political party system was weak in caderization and grooming potential national and regional leaders.

Now a successful Mayor or Bupati has a chance of upward mobility to become Governor or eventually President. Unlike politicians, this new breed of potential national leaders already has experience in government.

Jokowi won the Presidential elections by gaining 53,15% of the votes against the retired general Prabowo 46,85% with a margin of 6,3% or 8.370.732 votes.

This result was disputed and the case was brought to the Constitutional Court, that reaffirmed the KPU’s decision that Jokowi was declared the winner. It is worth noting that KPU, which is an independent election body, and the Constitutional Court, which is mandated to adjudicate on election disputes, have been key factors in political stability. Hundreds of cases of election disputes were referred to the Constitutional Court and its rulings were generally accepted, therefore strengthening the process of elections with integrity and preventing election disputes to develop into conflicts.

While winning the election, the biggest challenge for President Jokowi was that Prabowo developed a coalition of parties called the “Red and White Coalition” which controlled the majority of seats in parliament (52% or 292 out of 560 seats).

Sceptics questioned how Jokowi could develop national policies in view of possible disagreements in a parliament which was controlled by the opposition. Here idiosyncrasies matter.

To me, Jokowi has a strong persuasive power (soft power) but at the same time he won’t shy away to use his authority, the combination of which is called smart power. When he was Mayor of Solo, it took him more than 50 meetings (breakfast, lunch, coffee, tea, dinner) to personally persuade small vendors of a filthy market to move to a new marketplace. At the end of this process, they accepted and they moved to a new marketplace like a carnival, all wearing traditional Javanese dresses.

During his time as a candidate of Governor of Jakarta, many were sceptical that as successful of a Mayor as he was, he was doubted to be able to solve the complex problems of Jakarta such as the illegal traders in Pasar Tanah Abang and also the eviction of those squatters in Riario reservoir. In reality, as Governor he successfully persuaded them to move out and occupy low-cost housing, fully furnished apartments provided by the government, without additional costs from the Governor’s office. This sense of empathy – stemming from his family’s experience – in addition to decisiveness and “hands on” ethics, were key as he rose towards to his presidential candidacy.

Strengthening the independent candidates vis-à-vis political parties

Candidates for public posts must be nominated by political parties. The problem is, as the political party system is weak and continues to fail in introducing good candidates, independent candidates can be a good alternative. But a good candidate or candidates may not have the support of political parties. Here is the interplay between independent candidates and civil society. Through organized volunteers, mainly using social media as means of their campaigns, the candidature of Jokowi is one case in point.

Waiting for 10 years in opposition, Chairperson of PDI-P President Megawati herself wanted to be a presidential candidate. But successive polls prior to the registration of presidential candidates consistently showed Jokowi’s dominance. Based on the calculation of his popularity and high electability, PDI-P backed Jokowi in the Presidential race and he won.

But the ensuing problem was to what extent Jokowi would be dependent on Megawati and PDI-P. Would he be a puppet President? This would be displayed at his first cabinet appointments, where Jokowi did not rely on his own power of President but rather used the Anti-Corruption Commission (KPK) to screen whether candidates got the “green, yellow or red light” from KPK.

An additional example, the current Governor of Jakarta, who was Jokowi’s vice Governor, Basuki Tjahaja Purnama or Ahok, was able to generate one million signatures, which was more than sufficient to meet the requirements of becoming an independent candidate in the next Governational elections. As controversial as Ahok is, his popularity and electability are very high in comparison with other potential candidates. Political parties, including the largest party PDI-P, do not have stronger candidates from their own. Yesterday, several political parties including PDI-P eventually nominated Ahok as their candidate.

This trend was supported by the fact that in the direct elections the quality and integrity of candidates become the key to winning elections, because our voters are “floaters” as they do not follow party lines. That’s why Jokowi won the Governor’s race in 2012 and Presidential race in 2014, despite that fact that on paper both his competitors, Fauzi Bowo and Prabowo were supported by a coalition of political parties.

Approaching his two years in power, I think President Jokowi has clearly consolidated his power base. In the second reshuffle of the cabinet last July, we see his confidence in appointing new Ministers or removing former members of cabinet seemingly by his own authority. Jokowi has shown independency vis-à-vis Mrs. Megawati and her party PDI-P and several coalition member’s who initially supported his candidacy and helped him win the presidency.

Starting as President with a minority support in parliament, now, following recent swing position of three parties from the Prabowo led Red and White Coalition, namely PPP, PAN and Golkar, the Government can assure support of the majority of seats.

Tax amnesty

One clear example is the new government policy on tax amnesty. Even within the government, the draft policy on tax amnesty was controversial as the National Police and Attorney General did not agree on tax amnesty. But in the Parliament the draft tax amnesty law passed smoothly.

Key to President Jokowi’s election promises was his annual economic growth target of 7%. He promised to focus on infrastructure development, intensifying the anti-corruption campaign and simplifying the process of doing business in Indonesia, including a series of economic reform packages.

The reality is that last year Indonesia’s economy grew by 4,8%; this year it is projected to grow to 5 – 5,1% and next year the growth would be slightly higher. Certainly far below his election promise.

But in light of the current global economic downturn, an average of 5% annual growth is still high.

In fact, Indonesia is the 3rd fastest growing economy following India (7,2%) and China (6,7%). In comparison with other BRICS members: Brazil (-3,8%) Russia (-0,6%) and South Africa (0,8%). In the past few years, Indonesia export revenues have decreased as the demand and price of commodities and raw minerals also fell.

Domestically, tax revenues have been far below the earlier target. Therefore, national budget cuts were deemed necessary. But this may negatively affect the financing of priority projects, in particular infrastructure development. Hence the importance of tax amnesty, to attract the billions of Indonesian capital abroad as well as to enlarge the tax basis at home.

Conclusion

Based on surveys by CSIS and Kompas released in September 2016, it was concluded that Jokowi’s approval rate was increasing, as well as the hopes of the Indonesian people of his policies and administration. This is an anomaly of mid-term evaluations

How about 2019? Outside of the PDI-P coalition that supports Jokowi, Golkar that recently left the opposition group and joined the government, has already nominated Jokowi as a candidate for the Presidential Elections in 2019. This is a well-calculated decision. As recent surveys show that by nominating Jokowi, Golkar has increased it’s own approval rating by 2,7% (from 11,4% to 14,1%). Even though it is still lower than the main sponsor of Jokowi PDI-P (34,6%).

The success of Jokowi has automatically increased PDI-P’s profile from 25% in 2014 election to now 34,6%.

To make predictions in politics is a risky business. Because in politics even one day is too long. More so, to predict what will happen in 2019, when President Jokowi‘s presidency still has three more years to go. It’s too early to predict what will happen. But reading the trend, to me, if Jokowi is successful in his flagship infrastructure projects, I think he would be easily re-elected.

A recent survey by CSIS disclosed Jokowi’s approval rate at 66,7%. Kompas’ survey produced an even higher rate at 67%. Both surveys have published Jokowi’s electability rate at 41,9% and 37%, respectively, while his closest competitor Prabowo, only achieved 24,3% and 9%, respectively, reconfirming that if the elections were held today, Jokowi would be re-elected as President.

If he is re-elected, what does it mean? First, continuity and stability. Continuity in the sense that President Jokowi will strengthen his policies without much disruption. Indonesia would continue to enjoy political stability and national peace and security.

Finally, in the same CSIS survey, 65% of Indonesians are optimistic about Indonesia’s future and 89% of Indonesian’s are happy with their lives. This is reaffirmed by the Gallup survey in March 2016, where Indonesia’s happiness rate was also at 82%.

The aforementioned political and national stability combined with public optimism provides a good basis for the continuous rising of Indonesia and a strong basis for effective implementation of the Indonesia-Netherlands Comprehensive Partnership.